Jan 19, 2007

Antitrust Activity and Price Fixing by Photographers

Many photographers are unsure about how to price their goods and services, so they often will check with others to see how they do it. They sometimes will solicit this information on web forums only to be told that activity is illegal. But is it? It depends.

Asking other photographers what they charge for their services is not illegal. Making an agreement with other photographers about what to charge likely would violate restraint of trade laws. Your words or even your actions can comprise an agreement.

Most states have restraint of trade laws that prohibit price fixing. Federal laws are known as antitrust laws or the "Sherman Act and Clayton Act." And most laws, state and federal, make price fixing a crime. A lot of people have gone to jail for this. The problem arises because the first step in making price fixing agreements among competitors is exchanging information about prices. It is the second step that kills you. So you need to ask yourself, "Why do you want to know what your competition is charging?"

For example, if you continually ask other photographers what they charge and then adjust your pricing to match theirs, your conduct probably is illegal. A photography organization that conducts a survey of pricing and then posts the results or "average" along with even a subtle suggestion that this is the price to charge might be deemed to have conducted illegal activity. If you ask others what they charge so that you don't price yourself out of the market or charge too little, then you probably aren't breaking the law. But it's best to check your competitors' pricing rarely and not automatically use it as an excuse to change your prices to match theirs. When you are asked what you charge, give ball park approximations rather than exact numbers.

In reality, the photography industry is competitive and it would be difficult to fix prices. But whatever you do, it's best to stay under the radar of the U.S. Justice Department.